On Chrematistics and societal problems

This post was originally posted on Medium last month. For current readers of this blog, many of the ideas in this post were expressed in earlier posts containing the Mammon metaphor.

At some point in your life you’ve probably encountered metrics that are misleading or not useful. At work, maybe you were given a performance indicator disconnected from the value of what you do, like lines of code produced as opposed to being evaluated based on the code’s function. Perhaps you took a test you knew didn’t actually measure your subject knowledge. You simply studied the test material, ready to regurgitate what was expected of you.

We rely on metrics like this because the complexity of human activities makes evaluating outcomes directly difficult. Measuring understanding, trust, health, or competence requires judgment, context, and time. So we build proxies as stand-ins for things that represent the outcomes we care about.

For most purposes, this works well enough. You’re still learning if you’re studying for a one-off exam; similarly lines of code as a productivity metric still encourages code production. But some problems are so complex that breaking them down into simple, measurable components neither adds clarity nor guarantees success. Instead, metrics distort the goal, driving us away from what actually matters.

This isn’t just a measurement problem — it’s a difference in ends and means. That is to say, the metrics effectively become their own objective distinct from what it is we truly want, supplanting the original goal entirely. Over two thousand years ago, the philosopher Aristotle was concerned with activities that had this tendency which he called it chrematistics.

As I discussed before, chrematistics, often translated as “wealth-getting,” is a way of organizing activity around a single, endlessly accumulable value. Under chrematistics, diverse human purposes are flattened into a single value (in this case profit and wealth) at the expense of everything else.

However, the insidious part of chrematistics isn’t rooted in wealth itself, but the maximizing and totalizing logic it encourages. Any activity that has no inherent end and selects for very simple and measurable metrics can lead us to pursue outcomes against our interests. In this sense, chrematistics isn’t about money, profit, or greed, but about replacing highly context dependent goals and activities with simple, unbounded measures of success.

When entire systems are organized around simple measures of success, people typically attribute the failure as a failure of metric, vision, or execution. But the issue is much deeper than that. Unbounded, metric-driven activities behave like optimization processes. In other words, even if everyone is acting in good faith and performing to the best of their ability, the system can still move steadily in the wrong direction. Over time, these activities select for behaviors that best satisfy the metric alone and nothing else. For simple goals this may be acceptable, but when a metric is only a simple proxy for a more complex goal, “improvement” becomes self-undermining.

The result is what I call maloptimization, the tendency for continuous improvement processes to maximize one value in ways that degrade or destroy others we care about. It is not the absence of optimization, but its “wicked” inversion.

Maloptimization does not require bad actors, corruption, or incompetence. Essentially, once a metric becomes the basis for selection, participants must align with it to be successful and avoid punishment. Every step made to align with a poorly selected metric is rational and defensible, and consequently each choice looks like progress. However, when zooming out to see the bigger picture, it becomes apparent that these actions degrade the conditions that give the metrics meaning in the first place.

You’ve likely noticed the effects of systemic maloptimization across society. In the last post I mentioned how the US’s No Child Left Behind policy became “teach to the test,” worsening the quality of education for many students. Something similar has happened in academia where researchers avoid genuinely novel or risky topics in order to maximize chances at publication. In your own life, maybe you’ve found yourself pursuing likes over meaningful connections on social media, chasing numbers instead of friends.

Given how dangerous optimization can be when done poorly or carelessly, I’ve metaphorically likened maloptimization to a demon or evil god who gives us what we think we want by exacting “payment” in the form of everything else we value. Elsewhere, I’ve gone into great detail about the three different types of optimization failures that lead to maloptimization.

Chrematistics in a wickedly complex world

Our civilization has embraced the mindset of chrematistics to solve problems. We act on what can be easily measured, lack a plurality of frameworks for measuring risk and success, and we simply ignore whatever we cannot measure. This has worked well in many contexts; however, as the scale and scope of problems we face increase, this mindset is ill-equipped to navigate this complexity.

Many researchers have taken to calling many of today’s hardest challenges wicked problems. These are “wicked” not because they’re evil but because they’re tricky. Wicked problems don’t behave like simple engineering problems where you can easily work towards an incremental solution with clearly defined steps. Problems that fall into this category are multidimensional, and high-context: there are a lot of different and conflicting things you have to get right in order to make progress. Ironically, though, progress can often create contradictory and changing requirements elsewhere. This means wicked problems tend to resist one-size-fits-all solutions, instead requiring actors to specify their values and decide what tradeoffs they’re willing to make at different stages of the problem.

Consider climate change. It’s an existential behemoth of an issue that touches on every aspect of our lives. Solving it requires evaluating energy, food systems, development, geopolitics, ecology, and many, many other domains. There is no single solution nor any universal metric that can tell us when we have “beaten” climate change. There are, of course, better and worse outcomes, but each one comes with its own set of tradeoffs. Those tradeoffs require different groups to make distinct sacrifices that they might not want to make. That’s why while data and metrics are invaluable for evaluating climate solutions, data alone cannot tell us what to do. Every climate solution has to be understood in its local context, taking into account the specific tradeoffs of that decision.

With problems like this, the question is no longer how to better optimize the “right” objective, but how to govern processes that resist pure optimization in the first place. This requires more focus on judging values, priorities, and acceptable risks, which is why wicked problems are inherently political projects.

Market capitalism: creator and solver of wicked problems

We currently face many wicked problems today, from nuclear proliferation to pandemics and much more. But market capitalism, the predominant system of governance in much of the world, is itself a wicked problem. Unlike these other problems, though, it is also one of the primary mechanisms for solving the many other wicked problems we face.

Markets are extraordinarily good at coordinating action under uncertainty. By compressing information into prices and incentives, they allow millions of independent actors to make decisions without centralized control. This makes markets powerful tools for mobilizing resources, scaling solutions, and adapting to issues like climate change.

But those same strengths become liabilities when markets are asked to govern problems that resist simplification. Because markets rely on narrow, legible signals to function, they tend to privilege what can be priced, measured, or owned. Whatever falls outside those boundaries, like long-term harms, has difficulty registering inside the system.

This is where chrematistics reenters the picture. When market participation is organized around unbounded metrics like profit, growth, or shareholder value, success increasingly depends on exploiting whatever aspects of reality the system cannot easily regulate. Over time, competitive pressure shifts from improving outcomes to optimizing around the rules themselves.

The result is not market “failure” in the usual sense. It is market overperformance along dimensions that are rewarded, coupled with systematic neglect of the conditions markets depend on to function at all. This shows up in concrete ways: a focus on GDP that correlates with rising procyclical mortality, or stock buybacks prioritized at the expense of innovation and employee compensation. Rising healthcare costs, environmental degradation, institutional erosion, and persistent inequality are not external accidents; they are predictable byproducts of routing wicked problems through a system designed to minimize explicit collective value judgments.

Solving the wicked problem of market capitalism requires balancing incentives with restraint, dynamism with stability, and private initiative with public judgment — without any neutral or final way to resolve those tensions. Every adjustment creates new tradeoffs, new incentives, and new forms of adaptation.

This is what makes debates about capitalism feel unsolvable. They’re often not disagreements about what is happening so much as disagreements about meaning, value, and acceptable tradeoffs. We frequently fight over what should be protected, what can be sacrificed, and who gets to decide. Attempts to treat these questions as purely technical inevitably collapse back into chrematistics, substituting metrics for judgment and optimization for governance.

If wicked problems demand explicit choices about values and tradeoffs, then market capitalism as both the cause of and solution to wicked problems cannot be left to operate on autopilot. It must be continuously governed, not optimized, by democratic institutions that make visible, contestable, and revisable judgments about our future.

This is why much of my writing is focused on understanding how capitalism creates opportunities that undermine the governance of markets. If you want to learn more about this topic, read my post on the four paradoxes of capitalism where I go into detail about the tradeoffs that make market capitalism a wicked problem.